Wellington  - The Telecom Corporation of New Zealand was found guilty Wednesday of using its substantial market power to deter competition in markets involving high-speed data transmission.

A judgement by the Auckland High Court upheld a complaint by the business watchdog the Commerce Commission that Telecom breached provisions of the Commerce Act prohibiting powerful firms from anti-competitive behaviour.

The court found that from 2001 to 2004, Telecom used its position to charge downstream competitors disproportionately high prices for wholesale access to its network, preventing them from offering retail high-speed data services at competitive prices.

It ruled that Telecom's wholesale prices for access often exceeded its retail prices for the service and that its pricing was directed at deterring existing or potential competition in the market.

Commission chairman Mark Berry welcomed the decision, saying it confirmed that dominant firms must price essential inputs so as to enable efficient rivals to compete.

Telecom, which faces a fine of up to 10 million New Zealand dollars (7.4 million US dollars), has 20 days to appeal the decision.

A company statement expressed disappointment at the ruling, and group general counsel Tristan Gilbertson said, "The commission's claim related to pricing that was superseded in late 2004 by regulated data transmission service pricing."

He said Telecom was considering whether to appeal. (dpa)